Shiraz Jiwa v. Royal & SunAlliance Insurance Company of Canada, 2003 ONFSCDRS 130

Neutral Citation: 2003 ONFSCDRS 130

FSCO A03-000156

BETWEEN:

SHIRAZ JIWA

Applicant

and

ROYAL & SUNALLIANCE INSURANCE COMPANY OF CANADA

Insurer

DECISION ON A PRELIMINARY ISSUE

Before:

David Leitch

Heard:

August 26, 2003, at the offices of the Financial Services Commission of Ontario in Toronto.

Appearances:

Paul A. Gemmink for Mr. Jiwa

Stanley C. Tessis for Royal & SunAlliance Insurance Company of Canada

Issues:

The Applicant, Mr. Shiraz Jiwa, was injured in a motor vehicle accident on May 15, 1998. He applied for statutory accident benefits from Royal & SunAlliance Insurance Company of Canada ("Royal"), payable under the Schedule.¹ In December 1999, Royal issued a cheque for $15,000 to Mr. Jiwa in full and final satisfaction of his claim but Mr. Jiwa maintained in these proceedings that "he never received the money he was entitled to."² The parties were unable to resolve their disputes through mediation and Mr. Jiwa applied for arbitration at the Financial Services Commission of Ontario ("the Commission") under the Insurance Act, R.S.O. 1990, c.I.8, as amended.

At the pre-hearing discussion on June 12, 2003, the issues were identified as follows:

Preliminary Issues:

Does an arbitrator have jurisdiction to hear the main issue?³
Is Mr. Jiwa liable to pay an amount to Royal that does not exceed the amount assessed against Royal in respect of the arbitration, pursuant to subsection 282(11.2) of the Insurance Act, because he commenced an arbitration that is frivolous, vexatious or an abuse of process?

Main Issues:

Is the Insurer required to pay the insured $11,052.50 pursuant to a settlement agreement? Among other things, the insured relies on sections 44 and 65 of the Schedule.⁴
Is Royal liable to pay Mr. Jiwa's expenses in respect of the arbitration under section 282(11) of the Insurance Act, R.S.O. 1990, c. I.8?
Is Mr. Jiwa liable to pay Royal's expenses in respect of the arbitration under section 282(11) of the Insurance Act, R.S.O. 1990, c. I.8?
Is Mr. Jiwa entitled to interest for the overdue payment of benefits pursuant to section 46(2) of the Schedule?

The hearing of the preliminary issues was set for August 26, 2003 and the hearing of the main issues was set for December 18, 2003.

Result:

All issues will be heard together by me on a new date to be set by the Commission in consultation with the parties.
Each party will bear its own expenses in relation to the hearing on August 26, 2003.

ANALYSIS:

With respect for the pre-hearing arbitrator, in my opinion, this was not a case which was appropriately divided into "preliminary" and "main" issues. Characterizing a jurisdictional issue as "preliminary" can, no doubt, save the expense of litigating the "main" issues in the event the arbitrator determines that he/she has no jurisdiction over those issues. However, this procedure is most usefully employed where the witnesses and evidence required in relation to the main issues are different or more substantial when compared to the witnesses and evidence required in relation to the preliminary jurisdictional issue. Where the witnesses and evidence are the same or substantially similar, the utility of preliminary issue hearings is largely lost.

In this case, based on the submissions made on August 26, 2003, it would appear to me that the witnesses and evidence required in relation to the preliminary jurisdictional issue are likely to be the same or substantially similar to the witnesses and evidence required in relation to the main issues. They are also likely to be the same or substantially similar in relation to the second preliminary issue, the return of the Insurer's assessment fee, and the second and third main issues, the parties' hearing expenses.

While both parties were entitled to call witnesses at the preliminary issue hearing on August 26, 2003, neither party did so. Instead, Insurer's counsel urged me to draw inferences from the documentary evidence. Applicant's counsel appeared to believe that witnesses could not, or at least would not, be called to testify on August 26, 2003. However, he confirmed his desire to call the Applicant as a witness and he maintained that the Applicant's testimony would contradict the inferences which Insurer's counsel sought to draw from the documentary evidence. If so, this evidence may affect the resolution of both the preliminary issues and the main issues.

It is unfortunate that I did not hear the Applicant's testimony on August 26, 2003. Nevertheless, Applicant's counsel's confusion on this point was clearly related to the pre-hearing arbitrator's decision to divide the case into "preliminary" and "main" issues. In these circumstances, I am not prepared to simply deny the Applicant the opportunity to testify. Instead, I order all issues to be heard together by me on a new date to be set by the Commission in consultation with the parties. At the hearing, both parties will have the right to call witnesses or to lead further evidence so long as it is properly produced and disclosed in accordance with the Dispute Resolution Practice Code, 4th Edition. Disputes regarding further productions should be referred to the pre-hearing arbitrator.

EXPENSES:

Since the decision to divide the case into "preliminary" and "main" issues was made by the pre-hearing arbitrator, not the parties, I find that each party should bear its own expenses in relation to the hearing on August 26, 2003.

September 2, 2003

David Leitch Arbitrator

Date